What a 1099-INT Form Reports to the IRS and Why You Receive It

A 1099-INT reports interest income you earned to both you and the IRS

A 1099-INT is a tax form that reports interest payments made to you during the year. Banks, credit unions, investment firms, and other financial institutions send this form when you earn $10 or more in interest from savings accounts, money market accounts, certificates of deposit (CDs), bonds, or other interest-bearing accounts. The form goes to you and a copy goes to the IRS, so the IRS knows about this income whether or not you report it yourself.

You receive a 1099-INT for each financial institution that paid you interest, so you might get several forms if you have accounts at multiple banks or investment companies. The form arrives by January 31 each year and reports all interest paid during the previous calendar year.

The purpose is straightforward: the IRS wants to track all income you receive. Interest is taxable income, and the 1099-INT creates a paper trail. If you don't report the interest on your tax return and the IRS has a copy of the 1099-INT, you risk an audit or a notice that you owe additional tax plus penalties.

Key Takeaways

A 1099-INT reports interest income of $10 or more paid to you by a bank, credit union, or investment firm during the tax year.
Financial institutions send the form to you and file a copy with the IRS by January 31, so the IRS knows about this income automatically.
You must report all 1099-INT interest on your tax return, even if the amount is small or you did not receive a form.
Interest income is taxable at your ordinary income tax rate and may affect your tax bracket, tax credits, or other parts of your return.
If you receive a 1099-INT but did not earn that interest, contact the financial institution immediately to correct the error.

What information appears on the form

A 1099-INT contains several boxes, each reporting a different type of interest or related information. Box 1 shows the total interest paid to you during the year. This is the main number you need for your tax return. Box 2 reports early withdrawal penalties (if you withdrew money from a CD before maturity and the bank charged a penalty). Box 3 shows interest on U.S. Savings Bonds. Boxes 4 through 9 report federal income tax withheld, investment expenses, and other specialized interest categories that apply only in certain situations.

The form also lists the financial institution's name, address, and tax identification number, along with your name, address, and Social Security number. This information allows the IRS to match the 1099-INT to your tax return. If any of this information is wrong — especially your Social Security number — contact the financial institution right away and ask for a corrected form.

How 1099-INT interest affects your taxes

Interest reported on a 1099-INT is ordinary income, taxed at your regular income tax rate. If you earned $500 in interest, that $500 is added to your wages, self-employment income, and any other income you received. Depending on your total income for the year, this interest might push you into a higher tax bracket, reduce tax credits you were counting on, or affect your may be able to access for certain deductions.

For example, if you are close to the income limit for the Earned Income Tax Credit (EITC), an extra $500 in interest could reduce or eliminate that credit. Similarly, if you are over the income threshold for contributing to a Roth IRA, interest income counts toward that limit. The tax impact depends on your overall financial picture, not just the interest amount alone.

Where to report 1099-INT on your tax return

You report 1099-INT interest on Schedule B (Interest and Ordinary Dividends) if you have more than $1,500 in total interest and dividends for the year. If you have $1,500 or less, you can report the interest directly on Form 1040 without filing Schedule B. Either way, the total interest from all your 1099-INT forms goes into the same line on your return.

If you use tax software, the program will ask you to enter the interest amounts from your 1099-INT forms, and the software will place them in the correct location automatically. If you file by hand or work with a tax preparer, bring all your 1099-INT forms with you so nothing is missed.

What to do if you receive a 1099-INT you don't recognize

If you get a 1099-INT for interest you did not earn, do not ignore it. Contact the financial institution listed on the form immediately and explain that you did not receive this interest. The institution may have sent the form to the wrong person, used an incorrect Social Security number, or made a data entry error.

Ask the financial institution to issue a corrected form (marked as a correction) with the correct information or a zero amount. Once you receive the corrected form, keep both the original and the corrected version with your tax records. If the error appears on your tax return and the IRS contacts you, you will have documentation showing you reported the correct amount.

If the financial institution does not respond or refuses to correct the error, you can file Form 8275 (Disclosure Statement) with your tax return to explain the discrepancy. This form tells the IRS that you are aware of the 1099-INT but believe it is incorrect.

1099-INT versus other interest-reporting forms

Banks and credit unions use 1099-INT for most interest income. However, some interest is reported on different forms. Mortgage interest paid to you (if you are a lender) appears on Form 1098-INT. Interest from Treasury bonds and bills comes on Form 1099-OID (Original Issue Discount). Interest from certain state and municipal bonds may not be reported on any form because that interest is often tax-exempt.

If you receive interest from multiple sources, you might get several different forms. Each one reports a specific type of interest, and you need to account for all of them on your tax return. Your tax software or preparer can help you sort out which forms go where.

Frequently Asked Questions

Do I have to report 1099-INT interest if the amount is very small?

Yes. You must report all interest income on your tax return, regardless of the amount. Even if you received a 1099-INT for $5, that $5 must be included. The IRS has a copy of the form, so reporting it protects you from an audit notice.

What if I earned interest but did not receive a 1099-INT?

You still must report it. Financial institutions are required to send a 1099-INT only if interest is $10 or more, but you owe tax on all interest you earned. If you earned $8 in interest and no form was sent, you still report that $8 on your return. Keep your bank statements as proof.

Can I deduct investment expenses against 1099-INT interest?

Not directly on most returns. For tax years 2018 through 2025, miscellaneous itemized deductions (which include investment expenses) are not allowed. If you have significant investment expenses, speak with a tax professional about whether your situation qualifies for an exception.

What happens if I don't report 1099-INT interest on my return?

The IRS will likely notice the discrepancy when it matches your return to the 1099-INT the financial institution filed. You may receive a notice of additional tax owed, plus interest and penalties. The penalty for underreporting income is typically 20 percent of the underpaid tax.

Does interest from a savings account count as earned income for tax credits?

No. Interest is considered unearned income. It does not count toward the Earned Income Tax Credit (EITC) or other credits that require earned income, but it does count toward your total income for purposes of income limits and phase-outs.

This guide is for general information only and is not medical, financial, legal, or other professional advice. For decisions specific to your situation, consult a qualified professional. See our Editorial Policy.